Development of new and improved drugs to treat human illness is a costly and inefficient process. It costs over half a billion dollars to develop a compound into a medicine and more than 90% of compounds that enter human clinical trials fail usually due to unexpected toxicity. The attrition rate is even higher at the preclinical level where less than 1 in 10,000 drug "hits" successfully makes it to FDA approval. VistaGen, Inc. is developing a simple and reproducible screening technology for in vitro toxicity assessment, the Genesis ScreenTM. The system employs stem cells capable of differentiating into most tissues in the body. Once the cells are exposed to test compounds, toxicity is evaluated as changes in genomic and proteomic expression patterns as measured using cDNA microarrays and a protein SELDI-TOF microchip technology. This assay can rapidly prioritize drug "hits" based on a straightforward in vitro safety assessment. The objective of our previously funded phase I SBIR was to provide proof of principle of the Genesis Screen TM technology. We have successfully completed the goals of our phase I grant and in particular made major progress in developing proteomic fingerprints of toxic drugs. Furthermore, we have started to develop the biomathematics that will allow us to statistically compare the profiles of our library of molecular fingerprints of reference toxic drugs to test compounds to predict whether those test compounds are likely to be toxic or not. The objective of our Phase II application is to refine our assay to the point of bringing the Genesis ScreenTM system to the full-scale commercialization stage. We propose studies to increase the resolving power of our proteomic and genomic surrogate markers for selective classes of compounds with known toxicity. We will further develop the biomathematics component of the Genesis ScreenTM system These development studies will allow us to commercialize to the pharmaceutical industry a rapid and reliable high throughput Genesis ScreenTM system assay for prioritizing drug lead candidates based on toxicity assessment. PROPOSED COMMERCIAL APPLICATION: There is a very pressing need in the pharmaceutical industry for technology that increases the efficiency of drug development via more effective clinically predictive assays. Because drug development is so costly, working on a drug that will ultimately fail is enormously expensive. Our screening system will allow predictive tox assessment early during drug development and will increase the efficiency of clinical trials. The commercial version of this assay will be provided to the pharmaceutical industry as screening service.